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2017 (7) TMI 1279 - HC - Indian LawsJurisdiction - writing issued by Manager dated April 13, 2017 issued by Standard Chartered Bank - power of Manager to - declaration of the petitioners as a wilful defaulter - proceeding under section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 pending - Held that:- Rule 3 of the Master Circular of Reserve Bank of India on wilful defaulter prescribes a mechanism for the purpose of identification of the wilful defaulter. It contemplates two committees. The first committee is to work in terms of Rules 3(a) and 3(b), where the committee is required to issue a notice to the wilful defaulter to show cause and to consider such reply, if any. The second committee deals with an appeal preferred against the order of the first committee. In the present case, nothing has been placed on record to suggest that, the committee contemplated under Rule 3(b) of the Master Circular of the Reserve Bank of India had issued a show cause notice. Consequently the decision of the proper committee as referred to in the impugned order dated April 13, 2017 has no basis. A Bank carrying on banking business in India cannot ignore the Master Circular of the Reserve Bank of India in the context of its banking business. The bank, in the present case, not having complied Rule 3(b) of the Master Circular on Wilful Defaulters, the impugned notice dated April 13, 2017 suffers from material irregularity. The impugned writing dated April 13, 2017 is set aside - petition disposed off.
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